Scandal flings mud at India's `Mr. Clean'

By
Brahma Chellaney, Special to The Christian Science Monitor /
October 12, 1987

New Delhi

INDIAN politics has undergone a sea change in just six months since a scandal broke out over revelations by Swedish radio that armsmaker Bofors paid large bribes to clinch a $1.25 billion field gun deal with India. The affair has pushed Prime Minister Rajiv Gandhi to the wall. It has split his ruling Congress (I) Party, helped unite the splintered non-communist opposition, and tarnished his cultivated ``Mr. Clean'' image. Few people are willing to defend his handling of the affair. Despite Mr. Gandhi's overwhelming majority in the national Parliament, there is speculation that he may call midterm elections to overcome the crisis.

While major scandals have battered all governments in this country, where corruption is accepted as part of life, the latest affair refuses to die.

Columnist M.J. Akbar contends that this is because the central issue in the scandal is the stashing of illegal money hoards in foreign banks. Citizens are reluctant to forgive politicians spiriting the ``nation's wealth'' overseas, he says.

A related scandal involving alleged kickbacks on a West German submarine contract has added to Gandhi's political woes.

Both scandals are fueled by a widespread feeling that the government has been almost half-hearted in its attempts to find out who received the bribes. Opponents charge the administration with engaging in a charade.

India's fiercely independent press publishes new allegations almost daily, but even the little information officially available makes a bizarre story.

Bofors has admitted that it paid nearly $100 million in ``winding-up charges'' to three non-Indian companies in connection with the 155-mm howitzer deal with India.

Bofors president Per Ove Morberg, testifying last month before an Indian parliamentary committee, said Bofors paid $50 million to an Indian agent, Win Chadha, now in hiding in the United States. But Mr. Morberg refused to disclose names of other payees on grounds of commercial secrecy. Committee sources said the Bofors officials failed to convince them that the payments were unrelated to the howitzer contract.

A Swedish National Audit Bureau report earlier disclosed that the commissions - made in violation of a Bofors pledge to India that the firm would not employ middlemen - were deposited in secret Swiss bank accounts.

Critics charge that the bribes were funneled through at least 10 companies and that the recipients included relatives of Gandhi's Italian-born wife, Sonia. The prime minister has said publicly that he and his family did not benefit from the deal.

The opposition wants Bofors either to disclose the names of those who received commissions or to forfeit the contract. But the government says it cannot break the contract because the Army urgently needs howitzers.

The anticorruption campaign is spearheaded by Vishwanath Singh, who was ousted by Gandhi as defense minister after he ordered a probe into the military deals. Mr. Singh, seen by some as a potential prime minister, has demanded that Gandhi step down until he is cleared by an independent inquiry.

The Indian public, meanwhile, is pressing Stockholm to disclose the names of kickback recipients. In response to an appeal by the Indian Express, the nation's largest circulation newspaper, more than 100,000 Indians wrote letters to the Swedish Embassy here in support of the demand.

Gandhi's administration has tried to contain the scandal's fallout. In a surprise move last month, the government released all its correspondence with Stockholm and Bofors.

``Let the people now judge,'' declared Defense Minister Krishna Pant. ``We have nothing to hide.'' The action showed that the government had come a long way from its earlier position that no kickbacks were involved and that the allegations were orchestrated by unnamed Western agencies to ``destabilize'' India.

But the 26 letters released in Parliament raised more questions than they answered, analysts say. The correspondence showed that Bofors repeatedly shifted its stand on the bribes. It remains unclear whether Bofors considers the ``winding-up'' charges to be commissions.

Bofors has selectively provided ``clean certificates'' to some who are alleged to have received money. They include top Indian movie actor Amitabh Bachchan - a close Gandhi lieutenant - and the actor's Europe-based brother, Ajitabh.

Three key moves - film idol Bachchan's resignation from Parliament, the appointment of a parliamentary probe panel packed with Gandhi loyalists, and the decision to sign a treaty with Switzerland to obtain information on secret bank accounts of Indians - have failed to relieve the pressure on Gandhi.

Critics say Gandhi is trying to buy time by suggesting a treaty, which would take a long time to conclude. ``What is needed is not a treaty but an intelligent, determined recourse to the famous Swiss law, International Mutual Assistance in Criminal Matters,'' which makes banking secrets available in the investigation of overseas crimes, says A.G. Noorani, a leading attorney.